The Bank Secrecy Act

September 21, 2015

Heard of money laundering? The Bank Secrecy Act was enacted to prevent it. Under this rule, all financial institutions in the United States are required by law to assistant the U.S. government in detecting and preventing money laundering.

Originally passed in 1970 by the Congress of the United States, it has since then been amended multiple times to remain accurate and up to date. This act is also referred to as the “anti-money laundering” law and Currency and Foreign Transactions Reporting Act.

Under the Bank Secrecy Act, financial institutions are mandated to keep records or and report suspicious activity that could include money laundering, tax evasion, or other criminal activities. As more foreign bank accounts become common practice and cash purchases were prevalent in the housing market, it was important to maintain records on where cash was coming from when being used for major investments, especially with properties. A report will be filed if business is conducted and more than $10,000 in cash is part of the transaction.

Not only does this protect the financial institution, it helps protect the stability of our economy.